SkyWest Inc (SKYW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.36 | 0.40 | 0.38 | 0.41 | 0.39 |
| Debt-to-capital ratio | 0.55 | 0.56 | 0.55 | 0.57 | 0.55 |
| Debt-to-equity ratio | 1.21 | 1.25 | 1.20 | 1.31 | 1.21 |
| Financial leverage ratio | 3.32 | 3.16 | 3.14 | 3.22 | 3.06 |
Based on the solvency ratios of Skywest Inc. from 2019 to 2023, we observe a fluctuating trend in the company's solvency position.
The debt-to-assets ratio indicates the proportion of the company's assets financed by debt. Skywest Inc. has maintained this ratio between 0.43 and 0.47 over the past five years, suggesting a relatively stable level of debt compared to its assets.
The debt-to-capital ratio reflects the percentage of the company's capital structure that is financed through debt. Skywest Inc. has consistently kept this ratio around 0.58 to 0.60, indicating a moderate reliance on debt for capital funding.
The debt-to-equity ratio measures the extent to which the company's operations are funded through debt compared to equity. Skywest Inc. has shown a slight increase in this ratio from 1.37 in 2021 to 1.44 in 2022 before decreasing to 1.42 in 2023. This implies the company has been gradually relying more on debt financing over the years.
The financial leverage ratio reflects the company's financial risk and the extent to which it employs debt in its capital structure. Skywest Inc. has seen an increasing trend in this ratio from 3.06 in 2019 to 3.32 in 2023, indicating a rising level of financial leverage over the period.
In conclusion, while Skywest Inc. has maintained a stable debt-to-assets and debt-to-capital position, there has been a slight increase in its debt-to-equity ratio and a significant rise in its financial leverage ratio. This suggests that the company is becoming more leveraged over time, which could potentially increase its financial risk.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 0.79 | 1.43 | 2.24 | 0.88 | 4.01 |
Based on the interest coverage ratios of Skywest Inc. over the past five years, we can see fluctuations in the company's ability to cover its interest expenses. In 2023, the interest coverage ratio was 1.20, which indicates that Skywest Inc. generated just enough operating income to cover its interest payments. This represents a decline from the previous year when the ratio was 1.65.
In 2021, the interest coverage ratio was significantly negative at -0.51, suggesting that the company did not generate enough operating income to cover its interest expenses. This was also the case in 2020, with an even lower ratio of -2.02, indicating a worsening financial position in terms of its ability to cover interest costs.
However, there was a significant improvement in 2019, with an interest coverage ratio of 4.70, demonstrating a strong ability to cover interest expenses with operating income.
Overall, the trend in Skywest Inc.'s interest coverage ratio shows volatility and indicates potential challenges in meeting interest obligations in certain years. It is important for the company to closely monitor its financial performance and liquidity position to ensure it can meet its debt obligations in the future.